Steel Authority of India Ltd (SAIL) shares are under selling pressure after hitting their 52-week high 145.90 each in the first week of August 2021. However, metal stocks fell sharply after the Indian government imposed 15 per cent duty on steel exports by 9GoI and PSU stocks hit their fresh 52-week low. 63.60 per share on NSE. But, the stock has recently attracted the interest of foreign institutional investors (FIIs), which has helped maintain SAIL’s share price above the recent lows.
According to Share Market Experts, SAIL and other metal stocks declined in recent sessions due to sharp fall in metal demand and price in global trade. The rest of the loss was incurred by the Government of India which imposed 15 per cent export duty on steel. But, he said domestic demand is expected to return in the medium to long term due to factors such as rising government infra spending, revival of private capex and rising housing demand. It is apt for long-term investors to start accumulating in the stock from current levels, he added.
Highlighting the discounter buying by FIIs in SAIL shares, Sonam Srivastava, Founder, SEBI registered investment advisory firm Right Research said, “Based on the latest data, FII investment in SAIL is 4.58 per cent. It has increased slightly. Since December but lower than a year ago figures. Citibank NA is one of the largest foreign holders of the stock based on recent data.”
Sonam Srivastava further said that SAIL share price The price is at a one-year low as the metal prices started dumping across the globe amid fears of a global slowdown and slowdown especially in the Chinese economy, which is the biggest consumer of the metals. Sonam Srivastava said, “We are currently taking a cautious approach towards the metals industry, but the investment should look ahead and in the next 3-6 months horizon, we can see growth and infrastructure spending back, which is a big boost for SAIL. Could boost share prices.” Wright Research said.
On strong fundamentals, which could support SAIL’s share price rally in the medium to long term, Puneet Patni, Equity Research Analyst, Swastik Investmart Ltd said, “Domestic demand due to factors like rising government infra in the medium to long term In addition, due to the curbs on steel production by China due to environmental concerns and increased demand for green steel in developed countries (expensive to manufacture), Indian steel makers are expected to gain a stake in the global steel industry. Thus, long-term investors can deposit SAIL on the downside.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.